When we pay utility bills or buy gas, we’re paying for the direct cost of the fuel, such as how much it cost to extract and refine it. We know that fossil fuels are also responsible for creating pollution that damages the environment and poses a threat to human health. Those costs are not reflected in the bills you pay. To accurately compare fossil fuels to solar energy, you have to include those hidden costs of each.
To start, let’s compare the costs of solar energy and fossil fuels as we see them now. The best way to do so is to look at average prices in the United States for each. In 2017 the average cost of residential solar was 12.22 ¢/kWh, and 10.19 ¢/kWh for utility scale solar. In 2008 coal cost between 7 and 14¢/kWh and natural gas 7 to 10¢/kWh. When external costs, such as human health and environmental damages, are included these costs for fossil fuel generated energy go up substantially. For instance, a Harvard University study concluded that that these costs increase the costs of coal by anywhere from 17.8 ¢/kWh to 26.89¢/kWh of electricity generated. Let’s break down where these additional costs stem from.
What is an Environmental Externality?
In economics, an externality is a cost or benefit that is incurred by a third party who did not choose to experience those costs or benefits. Negative externalities are typically called “social costs,” and are not included in the costs of goods. Another cost to consider is environmental costs or externalities. These include air pollution, land degradation, loss of biodiversity, emissions, and many others. Negative externalities are often hard to quantify and estimates will vary from study to study. What is important is to recognize is that these social and environmental externalities pose a real economic cost.
The True Costs of Fossil Fuels
Land Use Impacts
The mining and drilling that is done to extract fossil fuels causes huge damage to surrounding ecosystems. Mining is typically used for coal, and drilling for oil and natural gas. Underground mining creates an acidic mine drainage that can be detrimental to plants, animals, and humans in the vicinity. Surface mining techniques, such as mountain top removal, cause extreme and often irreversible damage to local environments. Mudslides, earthquakes, landslides, and flash flooding are more common in areas surrounding surface mining operations, as well as pollution of local water sources. Oil and gas extraction through drilling causes contaminated water to be brought to the surface, which is difficult to safely dispose of. Fracking, the process of injecting liquid at a high pressure into objects like rocks to force them open and extract oil, causes even greater quantities of this water to be brought up.
Water Use Impacts
Fossil fuels have high impacts on water through both direct use and pollution. Water is critical in extracting fossil fuels for both drilling and mining, and the extraction process also creates waste water. An estimated 52 billion cubic meters of freshwater is consumed each year globally for energy production. Water is also polluted due to fossil fuels. Between 2008 and 2012 there were over 60 oil spills of more than 50 barrels each.
Huge amounts of emissions are emitted from fossil fuels, including those that impact climate change and those that have a more direct impact on human health. One of the first greenhouse gases that comes to mind when it comes to burning fossil fuels is carbon dioxide, which is warranted since in 2014 78% of US carbon emissions were energy related. A gas that is less frequently mentioned is methane, a main component of natural gas. Methane has 32 time the warming potential of carbon dioxide over a 100-year period, meaning that methane losses need to be kept close to zero for natural gas to be a more sustainable option than coal. The transportation of natural gas is where the most methane leaks stem from. This highly flammable substance is typically transported through pipelines, and leaks are common. In Boston alone, 3,356 leaks were found under the city streets. Large leaks can cause tens of thousands of tons of methane to be released. Human safety is also put at risk from natural gas transport. Between 2008 and 2015 there were over 100 deaths and over 500 injuries related to natural gas pipeline distribution.
Oil drilling is another source of methane. As access to easy to extract fuels becomes more limited, unconventional sources, such as tar sands, are being extracted more at even higher costs than conventional sources. These sources emit up to three times more than typical fossil fuels during during their mining and refining. Oil spills have received more attention in recent years, due to events like the Deep Water Horizon oil spill. Such spills have become less frequent, but do sometimes still occur, releasing thousands of barrels of oil and poisoning local ecosystems.
Human Health Risks
Human health risks start with mining and drilling workers. Underground miners are at risk of mine collapses and explosions, and contracting illnesses such as black lung disease. A Harvard study found that coal has been linked to lung, cardiovascular, and kidney disease, as well as higher rates of premature births and lower birth rates in areas surround surface mining operations. Drilling has its own set of risks. A quarter of the chemicals produced in fracking have been proven to cause cancer and other mutations, and about half can cause severe neurological, cardiovascular, endocrine, and immune system damages.
Air pollution created at every stage of fossil fuel use is another immense social cost. Air pollutants include sulfur dioxide, nitrogen oxides, and particulate matter. These have been linked to acid rain, chronic respiratory problems, elevated occurrence of premature death, and increased health risks for pregnant women and children. Acid rain increases the acidity of lakes and other bodies of water, harming aquatic ecosystems, as well as damaging trees. A full list of of the extent of human health damages and their extent, created by Scientific American, can be viewed below.
Things like land destruction, emissions, and health damages are hard to quantify and put a precise price on. Damages from extraction of fossil fuels alone have been estimated to total $74.5 billion, of 4.36¢/kWh of electricity produced. Coal alone has been estimated to add approximately 9 to 27¢/kWh in environmental and health damages to the cost we pay now. A 2013 study found that the average economic cost is about 32¢/kWh for coal, 13¢/kWh for oil, and 2¢/kWh for natural gas. The specific costs vary from study to study, but all demonstrate the fossil fuels have a real economic cost that is not shown in their upfront price.
Costs of Going Solar
Solar, while it has many benefits compared to fossil fuels, still has its own costs to society and the environment. While solar has fewer impacts, it still does affect emissions, land and water resources, and utilizes hazardous materials in its construction.
Land use impacts
Land use issues are more common for utility-scale solar projects, which take up large areas of land and offer less potential to share land with things like agriculture. While these solar arrays do require land space, they are often places, like brownfields, on land that is otherwise unusable, such as filled in landfills or alongside highways. Small scales residential solar projects however, such as residential solar, have minimal to no land use impacts since they are typically on rooftops.
Water use impacts
Water use is another area impacted by solar energy. While none is used in the actual generation of electricity, water is necessary in the manufacturing of components. Depending on what cooling technique is used, up to 650 gallons of water is used per megawatt-hour of electricity produced. Although this process is not water use free, it is less than fossil fuels. For instance, 20% of stressed watershed in 2008 were under stress due to power plants
Hazardous materials are also utilized in PV cell manufacturing. These materials include hydrochloric acid, acetone, and others. If not handled properly, these can cause serious damage to the environment and human health. However, manufacturers have a strong financial incentive to ensure that these materials are recycled due to their rare and highly valuable nature.
The final negative impact of solar energy is greenhouse gas emissions. Again, none are emitted during the actual production of electricity, but stem from the manufacturing, transportation, installation, and decommission of solar modules. Most estimates of the total life cycle emissions of a solar system are between 0.07 and 0.18 pounds of CO₂/kWh of energy produced. To compare, natural gas creates 0.6-2 pounds of CO₂/kWh, and coal 1.4-3.6 pounds of CO₂/kWh.
Human Health Risks
The main risks of solar energy are posed to installers, who often have to go onto roofs to install panels. These risks are not unique to the industry and OSHA has standards that cover them, such as crane and hoist safety standards.
Over time the efficiency of solar panels has increased as price has decreased. The graph below shows the price declines of all types of solar energy. Solar energy is a technology, not a fuel. This is why innovation is able to continue to drive the cost down, and will continue to do so. The graph below is of course not including the external costs of solar energy listed above. Due to the more recent expansion of solar energy, there have been fewer studies done to quantify these costs. It is clear that these externalities do increase the cost of solar, but their extent is far less than fossil fuels, and with areas like land use impacts there are alternatives with lower impacts being considered.
The Smart Choice
Both solar energy and fossil fuels impose costs on society that are not reflected in their prices. But when comparing the two, it is important to weigh those costs against each other. It is clear that fossil fuels have a greater price based the impacts on the environment and human health. Also, fossil fuels have less of a potential to lower those costs than a technology like solar that is constantly advancing. Solar energy is already saving ratepayers across the world money, as well as reducing negative impacts on our environment and health, and we will see that growth continue.
2.5 Cents Per Kilowatt Hour: America’s Cheapest, Cleanest Fuel ‘Holds Steady’ – https://insideclimatenews.org/news/20090930/25-cents-kilowatt-hour-americas-cheapest-cleanest-fuel-holds-steady
Comparing the Costs of Renewable and Conventional Energy Sources – http://energyinnovation.org/2015/02/07/levelized-cost-of-energy/
Environmental Impacts of Solar Power – http://www.ucsusa.org/clean_energy/our-energy-choices/renewable-energy/environmental-impacts-solar-power.html#.WYiBydMrK9Z
Green Job Hazards – https://www.osha.gov/dep/greenjobs/greenroofs.html
Solar Electricity Costs – http://solarcellcentral.com/cost_page.html
The External Costs of Fossil Fuels; Environmental and Health Value of Solar – http://www.energyandpolicy.org/value-of-solar-versus-fossil-fuels-part-two/
The Hidden Costs of Fossil Fuels – http://www.ucsusa.org/clean-energy/coal-and-other-fossil-fuels/hidden-cost-of-fossils#.WW4XjdMrK9Y
The Price of Solar is Declining to Unprecedented Lows – https://blogs.scientificamerican.com/plugged-in/the-price-of-solar-is-declining-to-unprecedented-lows/